Orkin Termite Ads Undergo Scrutiny

Five states and the District of Columbia are pressuring Orkin Pest Control to stop making promises the company can't or won't keep in its advertising and termite-treatment contracts.

The company has agreed to most of a series of demands that could end a two-year investigation by the states and change the way the business deals with its customers, documents obtained by the Sun-Sentinel show.

"When they say things like, `Call the Orkin man and your termite problems will be taken care of -- guaranteed,' we think that the average consumer has a right to expect there's a certainty to it," Florida Assistant Attorney General Bob Buchner said.

But termite treatments are not that certain, and the states want to make sure consumers aren't being misled. A stalemate on a couple of points, including how much Orkin should reimburse the government lawyers for the investigation, has prevented completion of an agreement.

The states last month made a final collective demand of $150,000 -- reduced from $200,000.

Attorneys general from Florida, New York, Texas, North Carolina, Ohio and Washington, D.C.'s corporation counsel have been working together on the case. Only Buchner, the lead attorney, would discuss the case, although without commenting on the negotiations themselves.

Consumers have complained that Orkin tries to dodge its responsibilities when the warranty calls for repairs of termite damage that happened under the company's watch.

"Many of them don't get it honored either in full or in part," Buchner said. "The most common thing they [Orkin] say is that it's old damage. That is a very difficult thing to prove and it puts the consumer in a position of arbitrating a case and getting an expert to testify that it's new damage."

Orkin's spokeswoman, Martha May, issued a statement Thursday:

"Orkin has been fully cooperating with the Attorney General's Office on this matter. The issues involve some ads that Orkin has not used for quite some time, and some miscellaneous contract issues such as the attorney general's preference that we put the American Arbitration Association's Web site address in our arbitration clause.

"We are very confident that this matter will be resolved favorably."

Ads stopped

Buchner contended Orkin continued to mislead consumers long after that particular campaign ended. Orkin says it quit running the ads in 1997.

Orkin has been under pressure in recent years from consumers who have pounded the company with lawsuits. An Alabama jury in August came back with an $80.8 million verdict against the pest-control giant for concealing termite damage for 15 years and failing to live up to the terms of its termite contract with Artie Mae Jeter of Tuskegee.

The company also settled a case with the state of Missouri in 1995 for allegedly using insufficient chemicals while treating thousands of houses. That resulted in agreeing to retreatments for customers that cost an estimated $7 million. Orkin also agreed to pay the state $700,000. Orkin's company literature claims 1.6 million customers nationwide.

Richelle Edwards, who owns rental property in Clearwater, ran into the sort of problem that the attorneys general are irked about.

After termites were found at her property, she grew frustrated with what she described as Orkin's unwillingness to either deal with the problem or live up to the repair guarantee in her contract.

A state Department of Agriculture and Consumer Services inspector investigated the case and found: "Orkin Exterminating Company had issued a repair guarantee with the initial treatment in October 1992 ... Orkin has not made any repairs as of today's date."

The report was written in 1998, more than two years after termite damage was first reported to Orkin. Edwards, contacted on Thursday, said she could not discuss the case due to a confidentiality clause in a settlement she had reached with Orkin.

Current Orkin contracts require consumers who are unhappy with the company's handling of their situation to go to arbitration run by a private organization. However, the contracts don't tell customers whom they need to call or mention that the average cost for the arbitration set up by the company is more than $800.

Under the negotiations with the five states and Washington, D.C., Orkin has tentatively agreed to abide by so-called consumer rules through the American Arbitration Association, which reduces the customer's costs to $125. Also, Orkin agreed to provide in its contracts a clear disclosure of the association's phone number and Web site. And it agreed to include a line that says consumers can still seek satisfaction under state consumer protection laws.

Another sticking point: Orkin's contracts stipulate that the company will take responsibility only for termite damage that occurs at least six months after treatments begin. The government lawyers want the coverage to begin within 60 days.